BUENOS AIRES CITY (ANDigital) The credit card is one of the most versatile tools to manage personal finances, but in order to take full advantage of all its advantages, it is essential to use it responsibly and avoid generating debts that become an excessive burden on the monthly budget.
This authentic pocket credit allows you to face unexpected expenses, finance consumption above income, divide payments into installments, take advantage of discounts and benefits, and even obtain cash advances through ATMs.
But for many people it becomes a headache when it comes time to pay the summary. Here are five key points to keep in mind to put the credit card at the service of the family economy.
The minimum payment
When only the “minimum payment” is paid, the unpaid balance is carried over to the next month with an interest rate. Currently, the maximum rate is determined by the BCRA and is 43% per year.
However, as with the rest of the credits there are additional costs to the interest rate, such as taxes, administrative expenses and insurance. All these items, which vary according to the bank and the type of operations and consumption carried out, make the debt higher. It is what is known as Total Financial Cost (CFT).
Cash advances
Credit cards offer the possibility of withdrawing money through an ATM. This operation is called a cash advance and the money does not come from the user’s account, but is a loan provided by the card. As with the minimum payment, the rate is currently regulated by the BCRA, which temporarily set it at 43% per year.
However, financing in this way is usually more expensive than obtaining an advance on assets or a personal loan, operations that can also be carried out from the ATM or through home banking.
Do not exceed consumption just to take advantage of a discount
When paying with a credit card, you can take advantage of various benefits: discounts, interest-free fees, points that can be exchanged for products or miles, if you are a member of the Aerolíneas Plus program. But when the consumptions are much higher than the income, it is inevitable to finance a part of the summary and that additional cost can be greater than the benefit obtained when making the purchase.
Do not accumulate cards
Many specialists in personal finance recommend not carrying more than one credit card in your wallet so that when the temptation is unavoidable, the action of overspending will not find support.
But in addition, using more than one card generates more maintenance, renewal and commission expenses, depending on the characteristics of the product and the package that the person has contracted with the issuing bank. And another not minor detail: having the consumptions divided into two plastics it is more difficult to keep track of the accumulated expenses.
Plan consumptions with the card within a global budget
Including the credit card in a budget that estimates income and expenses is essential to organize personal finances. Most people make this calculation mentally and in an estimative way, but the ideal is to keep a record through a spreadsheet or a simple notebook.
The monthly savings capacity is a good parameter to evaluate how far to spend with the card, because if the consumptions exceed that limit it will be necessary to adjust in other areas or refinance a part of the summary.
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